What is Solar Net Metering?

What is Solar Net Metering?

Net metering, or also known as net energy metering (NEM) is a billing mechanism that allows the owner of a Solar Photovoltaics (PV) System to store energy in the electric grid. When your solar panels generate more electricity than what you need, that energy will be sent to the grid in exchange for credits. For instance, if a residential customer has a Solar PV system on their rooftop, it may generate more electricity than their home can consume during the daylight hours.

If the home is net-metered, the electricity meter will run "backwards" to provide a credit against the electricity that has been consumed during the periods when your home's electricity use is greater than how much your system is outputting. This ensures that customers are only charged for their "net" energy use. On average, only 20-40% of a solar energy system's output ever goes into the grid, and this exported solar electricity is typically utilized by your neighbors and helps with their energy loads.

Even if you're not home and not using the electricity that your solar panel produces, you do not need to worry about it going into waste. Net metering sells the electricity you are not using into the grid and enables you to generate electricity efficiently. Most of the solar customers produce more electricity than using it; net metering allows them to export that energy to the grid and lessen their future electric bills.

The Benefits of Net-Metering

Using net metering can lessen the amount of money a consumer can spend every year on their electricity bill. They can even make money if they can generate more energy than they consume it. How? It's just that simple; the utility company pays them for that excess energy at a retail rate.

Reduced Electricity Costs

When you find yourself spending more than you should on your electricity bill, net metering will help you lessen the expenses you spend annually. As explained above, you can export the energy that you did not use to the power grid, enabling you to earn bill credits. This means that you can make a profit if you produce more energy than you consume because the utility distributor will credit you for that excess energy.

Relieve the Load of the Grid

As a homeowner or a business owner, it will be excellent to pressure off the grid by generating sustainable energy, especially during the times of peak power consumption. Net-metering is a great way to rely on renewable energy and promote its advantages that have not been utilized fully. If you want to be responsible for an active role in energy production, then this program is best for you.

Environmentally-Friendly Solution

The world is always at risk of possibly harmful elements that could create harm to the environment. Using renewable energy enables you to fight this, but net-metering is a great example of pushing forward sustainability. Not only will you benefit from it, but you are also helping the environment because you will reduce your carbon footprint.

Which States Allow Net Metering?

Under the Public Utility Regulatory Policies Act (PURPA), utility companies like Southern California Edison (SCE), Pacific Gas & Electric Company (PG&E), and Consolidated Edison must allow homes that generate their own electricity to connect to the electric grid. Thus, the companies must buy any excess power that homes or any businesses generate.

Thirty-eight states plus Washington, D.C. and Puerto Rico have mandatory net metering rules in place. In 2007, the number of people getting into net metering programs increased by 45 percent, to 48,820 [source: Energy Information Administration].

Although most of the states allow net metering, the policies and requirements still differ from state to state, which is then graded by the Network for New Energy Choices.

NNEC (Network for New Energy Choices) gives top grades to the states that give homes and businesses incentives to install renewable energy systems, give bill credits for sending excess energy into the grid, and reduce any red tape, fees, and unnecessary procedures. Net metering is one of the best choices you could ever make. It allows you to maximize your solar panel installation to its highest potential. That renewable energy in your home will serve as an agent of sustainability not only for you but for the environment as well. Start using net metering now and make the most out of your system!